Stocks hover near record highs, gold breaches $1,500

By Herbert Lash NEW YORK (Reuters) - Gold surged past $1,500 an ounce and a gauge of global equity markets hovered near record highs on Tuesday in a year-end rally spurred by hopes of a U.S.-Sino Phase 1 trade deal and as China's latest policy easing pledge added to investor optimism.

Reuters December 25, 2019 01:06:58 IST
Stocks hover near record highs, gold breaches $1,500

Stocks hover near record highs gold breaches 1500

By Herbert Lash

NEW YORK (Reuters) - Gold surged past $1,500 an ounce and a gauge of global equity markets hovered near record highs on Tuesday in a year-end rally spurred by hopes of a U.S.-Sino Phase 1 trade deal and as China's latest policy easing pledge added to investor optimism.

President Donald Trump said he and Chinese President Xi Jinping will sign the initial phase of the pending trade pact in a ceremony, the latest remarks by the U.S. leader to flag the deal is close to being finalized.

European stocks ground out fresh record gains as did the Nasdaq on Wall Street as equities remained on track to post their best year in a decade.

The pan-European STOXX 600 index <.STOXX> added 0.14% as it touched an all-time high and the domestically focused mid-cap index <.FTMC> in Britain rose 0.63% to hit a new high.

France's CAC 40 <.FCHI> and Spain's IBEX 35 <.IBEX> both closed little changed, while German, Italian and Swiss country indexes were closed for the day.

Blue-chip shares in China <.CSI300> rose 0.7% after Premier Li Keqiang said the government was considering more measures to lower corporate financing costs and hinted at "targeted" cuts in banks' reserve requirement ratio.

Gold passing $1,500 was big news in a quiet Christmas Eve session as it suggested investors may be hedging against a possible inflation hike next year, said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

Arone said he doubted inflation will be strong enough to negatively affect the market, but it could provide a jolt to investors lulled by interest rates below the historic norm.

"Even today with lighter volumes and high absenteeism, gold has breached $1,500," he said.

"To me it's indicative of this idea that potentially you could have an inflation scare in 2020 and perhaps investors are beginning to position themselves for such a scare," Arone said.

U.S. gold futures rose more than 1% to hit a high of $1,505.00 an ounce.

MSCI's gauge of stocks across the globe <.MIWD00000PUS> %, while its emerging market index lost 0.24%.

On Wall Street, the Dow Jones Industrial Average <.DJI> fell 36.08 points, or 0.13%, to 28,515.45. The S&P 500 <.SPX> lost 0.63 points, or 0.02%, to 3,223.38 and the Nasdaq Composite <.IXIC> added 7.24 points, or 0.08%, to 8,952.88.

The dollar was little changed against the euro and Japanese yen in holiday-thinned trading and U.S. Treasury yields rose, bolstered by a strong auction of five-year notes. Euro zone bond markets were shut.

The dollar index <.DXY> rose 0.03%, with the euro down 0.03% to $1.1083. The yen strengthened 0.03% versus the greenback to 109.37 per dollar.

Benchmark 10-year notes last rose 9/32 in price to yield 1.9031%.

Oil prices rose after Russia said cooperation with the Organization of the Petroleum Exporting Countries on supply cuts would continue and amid optimism that the United States and China could finalize the trade pact.

Brent crude settled up 81 cents at $67.20 a barrel, while U.S. West Texas Intermediate rose 59 cents to settle at $61.11 a barrel.

(Reporting by Herbert Lash; Editing by Andrea Ricci)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.